As great as it would be to consider every completed transaction a success, there will always be some situations in which the transaction is not over, as the customer may decide to return the item due to a defect or personal preference.
Brick-and-mortar stores have an advantage regarding returns, as the item can be brought to the counter and returned to the shelf. For online stores, however, this means that the product may need to be shipped back, and a refund will be in order. This can be an accounting and logistical nightmare, making low return rates ideal for eCommerce businesses looking to succeed and grow.
Luckily, companies can prevent high return rates by giving customers what they want the first time around. Roughly one-third of all online purchases are returned, which can be devastating to companies just starting and be troubling if let out of hand. Furthermore, companies are paying the price of the returns, meaning that the customer gets away scot-free, despite harming an organization monetarily.
While some returns are understandable and necessary, there are cases of “serial returners,” or individuals who continually return items every time they shop at a store, which can be detrimental to profits should it continue. This is not typically done with malicious intent but rather out of misunderstanding.
For example, roughly 20 percent of all clothing purchased online is returned because many customers buy clothing from retailers only to “try it on,” not understanding the harm returning it can cause. This is unavoidable and can only be somewhat deterred by stringent return policies, which can drive away potential customers.
It's easy to blame uninformed customers for high return rates, but in many cases, there are things a company can change about how they do something to lessen return rates. When companies have insight into what customers do not like about their product, they can then use this information to fix the issue and lower return rates.
What entrepreneurs must first understand about returns is the reasons why items are generally returned:
- Wrong/Unexpected size
- Poor/Unexpected quality
- Inaccurate product images or descriptions
- Suspected fraud
There are other reasons customers return items, such as unwanted gifts, but these are the general categories of returns. If your products or services fit into any of the above categories in the eyes of your customers, you can expect high rates of returns. Returns have been such an issue that companies have begun to develop software that helps understand why customers return items to determine which business factors should be changed to reverse this.
For example, it's common for people to misrepresent their clothing size as more minor than it is because positive self-deception is something all people do. This is expected and can be deciphered with “lie-detecting surveys.” By asking users indirect questions about their preferred style, fitting choice, and average clothing size, companies can deter size returns by giving customers an accurate representation of what they should be purchasing. These surveys can be created with special software, making the process a breeze.
Another reason for returns can be reduced returns because of inaccurate product images. Many companies believe they can visually represent the item; however, it looks best if the actual dimensions are posted somewhere. Typically, visitors will decide based on the image, so if it has been altered to look much better than in real life, customers will have no issue returning the item. Avoid this by using accurate photos of products, as this will deter returns from poor images.
There are other ways to help guide customers as they make their decision, such as using personal stylists as a feature of a clothing site. Personalizing the customer's experience can direct them to the right decision, much like a shopping attendant at a department store would. This will make the occasion memorable and joyous, reducing any returns.
Finally, another great way to reduce returns is by giving visitors a fun and memorable shopping experience on your site. Make your site attractive, and make the shopping experience fun and exciting. This can be done by including quizzes or other fun widgets to make the experience stand out from competitors.